Navigating Regulatory and Reimbursement Changes

The regulatory changes facing providers shift constantly yet always raise the demand for better clinical outcomes, safer care and improved patient health status all at less cost. Whatever direction-changes the future holds, providers can be successful by mastering four skills.

The first skill is the ability to acquire and aggregate patient data across the full network of care or the care continuum. Alternative payment plans aren't a fad. They're here to stay and will only grow in number, variety and complexity. No matter what form they take, the common thread is taking on the clinical and financial risk for patients who are not solely under a provider's roof or under a provider's direct control. Patients' health status or clinical outcomes can be influenced by clinicians, facilities and services anywhere along the full spectrum of care. Consequently, providers must be able to find, send, receive and use data from any non-affiliated provider during an episode of care. The enabler of that, of course, is interoperable health information technology.

The second skill is the ability to understand the relationship between clinical quality and financial performance. As studies have shown, the relationship between clinical outcomes and cost is slim at best. Patients don't enjoy better outcomes by paying more for care. As the industry moves to value-based reimbursement, payments will be fixed and tied to specific quality metrics. Providers that hit the quality targets will get paid and may share in any savings. Providers that miss the quality targets will have their payments reduced. Knowing what a provider's costs are, the costs of other participating providers and the costs of producing specific outcomes becomes essential. Providers must deploy technologies that enable them to collect, synthesize, analyze and act on cost and quality data.

The third skill is the ability to model and predict the impact of performance improvement. Many facilities excel at analyzing clinical and financial data. They examine what they did right and what they did wrong and adjust their behavior accordingly. What separates the great facilities from the good is using analytics to predict cost and quality outcomes based on different variables. These can be patient-specific variables that tailor a treatment plan that leads to a predicted clinical outcome; or these can be population-based variables that determine prevention and wellness interventions that lead to predicted improvements in health status. Patient-specific variables and population-based variables continually change. It's critically important for providers to capture that information, know how it affects patients and populations and adjust their protocols to generate the desired outcomes.

The fourth skill is the ability to create business models that maximize volume and value results. As the health care landscape changes, there will be very few hospitals and health systems in the future that will be the jack of all trades in their markets. Most will need to specialize and then coordinate services with other hospitals and health systems. They will need to look at their patient population and decide from a competitive standpoint what they need to focus on to generate the volume they need to drive revenue.. Hospitals and health systems must maximize their capabilities, assets and time on the services that make the most sense for their patient population.

The responsibility for honing these four skills doesn't fall on one particular c-suite position. It's the collective responsibility of the governing board, senior leaders, management and staff.

From an industry standpoint, it's the collective responsibility of the private sector to develop innovative solutions that give providers the tools they need to excel at the four skills required to navigate regulatory change. Rather than reacting to what the government may prescribe, let's take the lead to get to where we need to go.